Trump Signs Music Modernization Act Into Law

Washington D.C., USA : Musicians including Mike Love from the Beach Boys, Kid Rock, John Rich of Big and Rich, and Sam Moore of Sam and Dave came to the White House for the signing of the Music Modernization Act that substantially changes the way musicians are compensated for their work played on digital streaming services such as Spotify and Pandora.

The new law, in part, also ensures that songwriters and artists get royalties on songs recorded before 1972.

The Music Modernization Act, co-sponsored by Sen. Orrin G. Hatch (R-Utah) and Rep. Bob Goodlatte (R-Va.), is a response to the modern world of music streaming and satellite radio — platforms that did not exist when laws governing royalty payments to music creators and license holders were drafted decades ago.

The comprehensive music licensing bill corrects a number of pre-digital-era anachronisms. It creates a new independent entity that will license songs to companies that play music online, and then pay songwriters, including those who released hits decades ago before federal music copyrights took effect.

A broad coalition of musicians, music publishers, songwriters and broadcasters who pushed for the legislation hailed its passage as a historic achievement for an industry that has long shortchanged artists.

“As we celebrate the harmony and unity that got us here, we applaud the efforts of the thousands of performers, songwriters, and studio professionals who rallied for historic change to ensure all music creators are compensated fairly when their work is used by digital and satellite music services,” Recording Academy President Neil Portnow said in a statement.

After receiving unanimous approval in the House and Senate, the measure was signed into law by the president during a ceremony at the White House that was also attended by rapper and entrepreneur Kanye West, rap-rocker Kid Rock and Beach Boys founding member Mike Love.

“Our music licensing laws are convoluted, out of date and don’t reward songwriters fairly for their work,” said Hatch, who also is a musician and songwriter. “They’ve also failed to keep up with recent, rapid changes in how Americans purchase and listen to music.”

As a consequence, argued proponents, songwriters haven’t been properly compensated for their intellectual property, either due to outdated definitions or data inefficiencies. The goal: “To make it easier for music creators to make a living,” as a statement from digital accounting company Sound Exchange put it.

The new law “is the culmination of a gargantuan struggle that was resolved by an unparalleled alliance between all music industry stakeholders and the relevant tech companies,” said Richard James Burgess, chief executive of A2IM, a coalition of independent record companies. “In this digital age, more music is enjoyed by more people than at any time in the history of humankind. The signing of this bill represents a significant step toward better lives for music creators and those that support them.”

Musicians also praised the legislation.

“We are all … very grateful to Congress for recognizing the logic, common sense and desire for fairness behind the Music Modernization Act,” said musician and producer Peter Asher, half of the ’60s duo Peter & Gordon and producer of recordings by Linda Ronstadt, James Taylor, Bonnie Raitt, Steve Martin, Neil Diamond and others. “The bill makes some very sensible changes to the rules and brings the business of music up to date, enabling it to address fairly issues such as streaming and all the new technologies of the digital age.”

Singer-songwriter Paul Williams, who also is chairman and president of ASCAP, one of several not-for-profit performance-rights organizations that collect and distribute royalties on behalf of songwriters, said in a statement, “American songwriters work tirelessly behind the scenes to create the music that fans all over the world enjoy.” The new law, he added, “brings us one step closer to a music licensing framework that reflects how people listen to music today.”

One of the main achievements of the law, advocates say, is that it guarantees that writers of pre-1972 songs receive federal copyright protection, allowing them to earn payments from streaming services, some of which have regularly played those songs without paying royalties.

The legislation also adds transparency to the amount that streaming services pay to rights holders and establishes a centralized music licensing entity to collect royalties. As part of its mission, the entity is charged with creating and updating a detailed database of music composition copyrights to make it easier for online providers to pair songwriters and publishers with recordings.

“In most territories, there’s one entity that does all the licensing,” said Mark Goldstein, associate professor at USC’s Thornton School of Music and former senior vice president of business and legal affairs at Warner Bros. Records. “If you want a piece of intellectual property, you gotta go to that entity. You pay in.”

Not so in the U.S., he said, noting that there are multiple performance rights companies. “It’s a nightmare,” he said. “It’s inefficient.”

For the last decade, the Congressional debate over copyright law has been in a stalemate with content companies pushing for stronger protections, but seeing their efforts frustrated by a coalition of technology companies and digital rights groups.

But on Tuesday, we saw a rare moment of bipartisan and trans-industry harmony on copyright law, as the Senate unanimously passed the Music Modernization Act, a bill that creates a streamlined process for online services to license music and federalizes America’s bizarre patchwork of state laws governing music recorded before 1972. That will mean effectively shortening the term of protection of older music published between 1923 and 1954—under current law, these songs may not fall into the public domain until 2067.

The Music Modernization Act, which would substantially change the way musicians are compensated for their work played on streaming services, passed a major milestone in the Senate this week.

The Music Modernization Act aims to establish a modern system for licensing mechanical rights. It creates a new national database that will aim to cover all copyrighted music in the United States. If all goes according to plan, this new organization will offer streaming services “one stop shopping” for getting songwriters’ licenses for all the songs they want to stream, with the database helping to get the funds to the appropriate songwriters and music publishers.

This would make the licensing of mechanical rights more like the system used for licensing yet another music-related copyright: the right to perform music publicly. If you own a concert hall or other venue where music is played publicly, you sign licensing agreements with three national organizations—ASCAP, BMI, and SESAC—which together have arrangements with the vast majority of the nation’s music publishers.

That gets venues a blanket license to play any music they want to. It’s the job of ASCAP, BMI, and SESAC to figure out which music gets performed most often and divvy up the revenue accordingly. Companies that stream music online would like to have a similar arrangement, and the Music Modernization Act aims to give it to them.

The Senate approved the bipartisan bill unanimously on Tuesday, following House passage of a similar bill in April. The measures must now be reconciled before the legislation is sent to President Trump for his expected signature.

“I’m so pleased we’re one step closer to historic reform for our badly outdated music laws,” Sen. Orrin Hatch, a Utah Republican and one of the bill’s sponsors, said in a statement. “The Music Modernization Act provides a solution, and it does so in a way that brings together competing sides of the music industry and both sides of the political spectrum. As a songwriter myself, I know firsthand how inefficient the current music marketplace is. The MMA will help all the songwriters and other music creators who make music such a rich, vibrant, and essential part of American culture.”

The Senate legislation, which bears the same name as the House bill, combines the Allocation for Music Producers Act, which provides royalties for music producers; the CLASSICS Act, which provides royalties for songs created before 1972 from digital streaming services; and a watered down Fair Play, Fair Pay Act, which does not include the provision that broadcast radio should pay for songs.

“We’ve seen remarkable shifts in the music industry for decades now—and certainly over the past four years as we have advocated for the passage of omnibus music legislation,” Neil Portnow, President/CEO of the Recording Academy told ABC News in a statement. “With the recent passage of the Music Modernization Act in the Senate, following unanimous support earlier this year in the House, the playing field has been leveled so that all music creators can be fairly compensated for their work.”

SiriusXM, one of the bill’s biggest opponents, compromised after some last-minute negotiations.

Sirius XM said it has been paying artists for years and the major reason it opposed the bill was that terrestrial radio doesn’t compensate artists for music they released before or after 1972, and it said that was unfair.

Paying artists for their pre-1972 music played on streaming services and now terrestrial radio is a major component of the bill.

“SiriusXM, joined with Azoff Music Management, the Recording Industry Association of America (RIAA), and the National Music Publishers Association (NMPA), to announce an agreement on the Music Modernization Act,” a statement released by SiriusXM said.

The changes build upon existing language to confirm in law that artists will receive 50 percent of performance royalties from SiriusXM for pre-1972 sound recordings, and confirm that the existing sound recording royalty rate for satellite radio will remain in place unchanged until 2027, an additional five-year period.

Image : Singer Smokey Robinson testifies during a Senate Judiciary Committee hearing on music protections, at Capitol Hill in Washington.